2012 Tax Season

This post is the ninth in a series of weekly posts containing tax information and filing tips. Check back next week for our next post, or click here to read past posts. 

So today is the deadline for filing your federal tax return (and most state returns). Although many people associate filing their taxes with feelings of confusion, stress, and general misery, tax time can also help give low- and moderate-income families a financial boost through federal tax credits like:

• Earned Income Tax Credit, designed to supplement the wages of low- and moderate-income families (those who earned less than $50,270 in 2012). This credit is worth up to $5,891 and is available as a refund for families who owe little or no income tax.
• Child Tax Credit, designed to help families offset some of the costs of raising children. This credit is worth up to $1,000 per child. Families who owe little or no income tax can receive some or all of this credit as a refund if they earned at least $3,000 in 2012.  
• Child and Dependent Care Tax Credit, designed to offset some of the child and dependent care costs that families incur in order to work. This credit is worth up to $2,100, though the amount that can be claimed is limited by the amount a family pays in federal income taxes.

And many states offer their own versions of these credits. Read more »

This post is the eighth in a series of weekly posts containing tax information and filing tips. Check back next week for our next post, or click here to read past posts. 

April 15th is fast approaching, which means the time to file your taxes is running out. I know what you’re thinking – “I’d rather watch paint dry.” I felt the same way. Filing my taxes ranks high on my list of most boring life activities, but unlike waiting in endless airport lines or sitting in traffic, it comes with a great reward.

After filing my taxes, I felt accomplished – I crossed off a big item on my to-do list, I was now compliant with the law, and I had fulfilled my civic duty. But best of all, I knew I had a nice refund coming my way. Little did I know how quickly it would arrive. I filed my federal tax return online on March 26 and by April 3 the U.S. Treasury Department had deposited my refund into my bank account. Read more »

This post is the seventh in a series of weekly posts containing tax information and filing tips. Check back next week for our next post, or click here to read past posts. 

Tax Day is right around the corner! If you haven’t filed your taxes yet, here are the top 8 things you should know before April 15.

1. You may be eligible to have your taxes done for free.

If you make less than $51,000 a year, you may be eligible to have your taxes filed for free through an IRS-sponsored Volunteer Income Tax Assistance (VITA) sites. http://www.irs.gov/Individuals/Free-Tax-Return-Preparation-for-You-by-Volunteers

If you are over age 59, you may also be eligible, even if you earn a moderate income. The IRS-sponsored Tax Counseling for the Elderly (TCE) and the AARP-sponsored Tax-Aide sites both offer free tax services to individuals 60 years of age or older. For more information, check out this article.

2. Where to find a free tax service preparation center near you.

To find out where you can go to get free help with your taxes at IRS sponsored sites, go to http://irs.treasury.gov/freetaxprep/ or call the IRS toll-free at (800) 906-9887. This website will also tell you if the site needs an appointment or accepts walk-ins, so you can plan your visit.

For Tax-Aide sites, go to: www.aarp.org/money/taxes/aarp_taxaide/ or call 1-888-OUR-AARP. Read more »

This post is the sixth in a series of weekly posts containing tax information and filing tips. Check back next week for our next post, or click here to read past posts. 

Taxes. Just saying the word can make people groan. But the reality is, this time of year can actually bring good news to low- and moderate-income families all over the country. Federal tax credits such as the Child and Dependent Care Tax Credit (worth up to $2,100), the Child Tax Credit (worth up to $1,000 per child), and the Earned Income Tax Credit (worth up to $5,891), can give a boost to families whose incomes are too low to owe taxes. 

One family in Dallas took advantage of free tax preparation at a United Way VITA site and was rewarded for their effort. They qualified for the federal EITC and received nearly a $6,000 refund! Less than two weeks later, the refund was in the family's bank account and helped to pay for things that the family really needed: children's clothes, a crib, and a new car.  Read more »

Written by Susanna Birdsong, former NWLC legal intern

This post is the fifth in a series of weekly posts containing tax information and filing tips. Check back next week for our next post, or click here to read past posts.

On my first afternoon as a Volunteer Income Tax Assistance (VITA) site volunteer, I settled in to a computer station in the basement of D.C.’s downtown library to help people file their tax returns.  “And just one final question, if you don’t mind me asking,” I asked a mother as she smoothed hair out of her drowsy daughter’s face,  “how are you planning to use your tax refund this year?”  She smiled, and answered that she was planning on using the money to pay her bills.  “Every year, it’s what keeps us going,” she said. 

As a tax preparer with the local Earned Income Tax Credit (EITC) Campaign, this is one of the voluntary questions that I ask low-income taxpayers as I help them complete their tax returns.  The most frequent answer (by far) is the one this mom gave to me—the money’s going to pay the bills.  Read more »

This post is the fourth in a series of weekly posts containing tax information and filing tips. Check back next week for our next post, or click here to read past posts.

Not to make you panic, but there’s about a month left before the April 15 tax-filing deadline. State and federal income tax refunds can provide a significant economic boost for families. If you work with families (including your own!), you should know about some of the ways that families can use their tax refunds to build up their economic security, other than paying bills or making long-deferred purchases. If families file their taxes electronically and choose direct deposit for their refunds, they can:

• Put some of their refund in up to three different accounts, including checking and savings accounts, but also passbook savings, IDAs, IRAs, HSAs, Archer MSAs, and Coverdell education savings accounts. That means that they can save not just for a rainy day, but specifically for retirement, medical costs, or educational expenses.
• Buy a U.S. Savings Bond worth up to $5,000.
• Families can choose how much to put in the different accounts or the Savings Bond.

This post is the third in a series of weekly posts containing tax information and filing tips. Check back next week for our next post, or click here to read past posts. Read more »

This post is the second in a series of weekly posts containing tax information and filing tips. Check back next week for our next post, or click here to read past posts.

We’ve all seen it – the person on the corner dressed as some patriotic character spinning around a “HUGE TAX REFUND” sign. Since it’s the taxpayer (YOU) that is ultimately responsible for all the information on your tax return, promises of huge tax refunds are sometimes too good to be true. Here are some tips to help you avoid scams.  

1. IRS representatives do not initiate taxpayer communication by going go door-to-door or sending emails. If someone knocks on your door or sends you an email claiming to be a helpful representative from the IRS, do not give them your Social Security Number or any private financial information.  
2. You must provide proof of eligibility for any tax credits you are going to claim. Some preparers claim that if you pay them a fee, they will get you these credits without proof – they can’t.
3. The Economic Recovery Credit Program, Making Work Pay, and the Recovery Rebate Credit are EXPIRED programs – anyone that says they will get you these credits is trying to pull a fast one.

This post is the first in a series of weekly posts containing tax information and filing tips. Check back next week for our next post, or click here to read past posts.

It’s February, which means tax season is in full swing (even if you are in denial). For those who haven’t yet filed their 2012 taxes, I offer an item for your consideration prior to the April 15 deadline. Even those families who have already filed their tax returns for the last tax year (and hopefully claimed tax credits for which they were eligible) shouldn’t stop reading here.

April 15 isn’t just the deadline for filing your 2012 tax return without an extension. It’s the deadline for filing past tax returns! Specifically, it is the deadline for the nearly one million individuals and families who failed to file a 2009 tax return. Practically speaking, this means you can go back in time three years and get a do-over on your taxes. Read more »